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Beat the S&P With 5 Stocks Everyone Else Hates

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Short sellers think that
Waste Management (
WM) is a garbage stock -- and while they're right in the literal sense, they're betting big against a name that rife with short seller kryptonite: dividends. Dividend payouts are poison to short sellers because they automatically decrease their returns, and because they're the only investment return number that's directly up to the companies that pay them out. WM's 3.5% yield tips the scales right now.

And that high payout makes the firm's short interest ratio look even higher at 10.37.

Waste Management is the largest waste services firm in the country, with around 270 landfills and a massive fleet of vehicles that spans the U.S. The firm also owns 22 waste-to-energy plants that are designed to turn the waste that WM literally gets paid to collect into renewable energy that the firm gets paid for again. Garbage has a reputation for being a recession-proof business -- and while that's not exactly true (garbage volumes do suffer when the economy is in recession), it's more than fair to say that garbage collection in recession resistant. That defensive bent makes WM look all the more attractive as the broad market pulls back from all-time highs.

Size matters in the garbage collection business. That makes WM's unmatched scale a huge advantage, particularly in negotiating national corporate accounts, or in bidding the most efficiently (since it can spread major fixed costs like landfills across more operations). High levels of profitability and slowly growing sales make WM a prime short squeeze candidate in 2013.